Transcript Chapter 10
Business Process Reengineering & Innovation Jason Chen School of Business Administration Gonzaga University Spokane, WA 99223 [email protected] Innovation as a Response to Change in Market and Technology Technological Advances in Technology Opportunities EFFICINCY EFFECTIVENESS INNOVATION INNOVATION New Products and Services Market Needs Socio-political Changes Time Market What is Business Process and Business Reengineering? Business process: A set of logically related tasks performed to achieved a defined business outcome Business reengineering means radically changing how people work - changing business policies and controls, systems and technology, organizational relationships and business practices, and reward programs. Dr. Chen, The Trends of the Information Systems Technology TM -3 Principles of Re-engineering (by Michael Hammer) Organize around outcomes, not tasks Have those who use the output of the process perform the process Include information processing work into the real work that produces the information Treat geographically dispersed resources as though they were centralized Link parallel activities instead of integrating their results Put the decision point where the work is performed. BPR Radical Change = New organization + IT Types of Industry Organizational = Structure + Competitive Cooperative Strategies + Strategies Strategies BUSINESS REENGINEERING STEPS: 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process Dr. Chen, The Trends of the Information Systems Technology TM -6 Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Copy of Purchase Order Accounts Payable Purchasing Payment Purchase Order Vendor Invoice Receiving Document Receiving Goods Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing Payment Accounts Payable Database Purchase Order Vendor Goods Receiving Implementing Re-engineering The key activities of re-engineering can be organized into three phases referred to as the 3R’s Re-engineering – Redesign – Retool – Reorchestrate Tools for BPR Simulation Flow diagrams Work analysis Application development Workflow software Reorchestrate: Organizational Change Leadership Corporate values Cultural change Incentives Accountability Zeal/commitment Communication Comfortable with ambiguity Obstacles to change Celebrate success The C’s related to Organization Re-engineering Projects The 3C’s of organization Reengineering: The 4C’s of effective teams: - Customers - Commitment - Competition - Cooperation - Communication - Change - Contribution BUSINESS REENGINEERING STEPS: 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process Dr. Chen, The Trends of the Information Systems Technology TM -13 Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Copy of Purchase Order Accounts Payable Purchasing Payment Purchase Order Vendor Invoice Receiving Document Receiving Goods Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing Payment Accounts Payable Database Purchase Order Vendor Goods Receiving